Chemicals & Plastics

Chemicals & Plastics

Chemical Plastic Industry Financing

Delivering a comprehensive range of funding and ABL solutions for the Chemicals & Plastics Industry

How does No Credit Risk Invoice Factoring work for Plastics and Chemical Suppliers?

Factoring sometimes referred to as Invoice discounting, is a commonly used financing tool for small business. When your Plastics or Chemical company sells its goods or services, it generally offers payment terms to its customers, rather than require cash at the time of sale.

There are many sound reasons for this business practice, including increasing sales and developing long-term relationships. When such a transaction takes place, the business is left with an account receivable which it holds on its books until the customer pays it turns into cash.

  • Low Rates 1.25-2% per 30 days
  • No Credit Risk, Cash in Your Hands in as Little as 24 Hours
  • Up to 90% Advanced on Your Invoices

What is Needed to Get Started with No Credit Risk Invoice Factoring?

Use our fast, safe and secure online funding application, Contact Form or call us at 888-400-5931.

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Chemicals & Plastics

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What Types of Funding is Available to the Chemical & Plastics Industry?

Non-Recourse Invoice Factoring

With No Credit Risk Non-Recourse Factoring, the factoring company gives the chemical or plastics supplier, manufacturer or distributor a credit guarantee that they are responsible for the collection of your invoices. It might be all your invoices or just those from certain clients.

Typically this guarantee is in case your client files for bankruptcy. This is a critical point to understand that it is not a guarantee that you are protected for good or services that your client disputes for not meeting specifications. You are also not protected if your clients pay slower than normal.

However, this “insurance policy” against bankruptcy is critical for your survival. Toys R Us, Vitamin World, Gymboree, Payless ShoeSource, Gander Mountain could be your ‘risk-free’ client, yet they are all examples of companies that filed bankruptcy that were once thriving companies.

Benefits of Non-Recourse Invoice Factoring for the Chemical and Plastics Industries

  • No Credit Risk, Cash in Your Hands in as Little as 24 Hours
  • Low Rates 1.25-2% per 30 days
  • Up to 90% Advanced on Your Invoices
  • We Become Your Credit Department
  • Payroll Funding
  • IRS Issues and Liens Can Often Be a Non-Factor
  • Pre-approve Your Clients Credit
  • Credit Protection Against Bankruptcy Through Paragon’s Non Recourse Factoring

Purchase Order Financing

Factoring is both a cost-effective and relatively simple process. Your creditworthy client, (ie, Dow, BASF, ExxonMobil, Formosa Plastics) receives the product, the factoring company verifies a few important facts including your customer’s happiness with the quality, quantity, and timeliness of your product (documentation requirements are also confirmed). You are advanced up to 90% of the invoice amount now and in the future receive the balance less the factoring fee when your client pays the factoring company.

What if you don’t have the money to buy the goods? This is where Purchase Order Financing or a Vendor Guarantee applies. PO Funding is where you need the factoring company to buy the goods for you (Cash Against Documents (CAD) or a via a Letter of Credit) or you need to use the factor’s creditworthiness for your vendor to release the goods and be paid from the Factoring proceeds (a Vendor Guarantee).

Remember, you can have Invoice Factoring without PO Funding, but you cannot have Purchase Order Financing without Invoice Factoring.

Benefits of Purchase Order Financing for the Chemical and Plastics Industries

  • Letters of credit
  • A PO Financing is not a loan
  • PO Financing Pays Your Suppliers or gives them Payment or Vendor Guarantees
  • This allows you to take on bigger orders
  • PO Financing with Paragon includes A/R Management
  • You can leverage our fulfillment and logistics expertise
  • Credit protection against bankruptcy through Paragon’s Non Recourse Factoring

Chemical and Plastic Industry Facts

      • The top three countries that benefit from American plastics by way of U.S. exports are Mexico, Canada, and China.
      • Roughly 107.5 billion pounds of plastics and resins were manufactured in 2013 — an increase over the previous year’s 105.9 billion pounds.
      • Plastics employs nearly 900,000 workers in the United States alone
      • The chemical industry can be broken down into 3 main categories, Basic chemicals, Specialty chemicals, and Consumer chemicals
      • The largest chemical companies in the world, in order of size, are BASF, Dow Chemical, Sinopec, SABIC, Formosa Plastics, Ineos, ExxonMobil, LyondellBasell, Mitsubishi Chemical and DuPont

    source: www.firstamericanplastic.com

    What is the Factoring process for Plastic and Chemical companies?

    The factoring process is very straightforward. Acting under a simple agreement, a business sells its accounts receivable to a finance company (a “Factor”) in return for an immediate cash advance-usually 80-90% of the invoice amount. Invoice discounting is normally conducted under what is called “full notification,” meaning the account debtor is made aware that the invoice has been sold, and is directed to make payment directly to the finance company.

    The Factor then follows for payment of the receivable, deducts its fees from the proceeds, and remits the balance to the business. Invoice discounting is the selling of accounts receivable to a third party to improve cash flow.

    What does it take for Chemical and Plastic Suppliers to Qualify for Funding?

    Who can afford to wait 45, 60 or 90 days to receive the payment by your large commercial or government customers? Factoring companies like Paragon look at your customer’s ability to pay, not your personal credit. Receivables factoring provides you the working capital your company needs. To qualify for Accounts Receivable Financing, you need:

    • Creditworthy Business Customers
    • Proof of Work Completed or Product Delivered
    • Operate as a Corporation
    • Decent Profit Margins
    • Copies of your Contracts, Agreements or Purchase Orders with your Customers
    • Revenues of $25,000-$10,000,000 per month
    • Invoices free of Tax Liens and other Encumbrances
    • No Open Bankruptcies

    What Type of Chemical and Plastics Companies use Factoring?

    • Petrochemical
    • Industrial Gas
    • Dye and Pigment
    • Alkalies and Chlorine
    • Gum and Wood
    • Ethyl Alcohol
    • Plastics Material and Resin
    • Synthetic Rubber
    • Organic Fiber
    • Fertilizer
    • Pesticide and Other Agricultural Chemical Manufacturing
    • Paint and Coating
    • Adhesive
    • Soap and Other Detergent
    • Printing Ink
    • Explosives Manufacturing
    • Photographic Film, Paper, Plate, and Chemical Manufacturing
    • Plastics Bottle, Bag, Laminated, Plumbing, Foam, Pipe Manufacturing
    • Rubber Product Manufacturing
    • Electrical Supply Manufacturing
    • Ceramic, Floor Clay Manufacturing
    • Glass Manufacturing
    • Concrete Manufacturing
    • Lime Manufacturing
    • Gypsum Product Manufacturing
    • Abrasive Product Manufacturing
    • Cut Stone and Stone Product Manufacturing
    • Ground or Treated Mineral and Earth Manufacturing
    • Mineral Manufacturing

    Contact us today for the perfect factoring program that works for you.

    GET FAST FUNDING FOR PLASTICS AND CHEMICAL SUPPLY COMPANIES TODAY!

    Apply Securely, call 888-400-5931 ext 1 or email us.

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